Liberals choose gas over coal in Australia’s largest coal region

Liberals choose gas over coal in Australia’s largest coal region

There’s no logic to the Coalition’s energy policy.

Although Energy Minister Angus Taylor did the right thing by rejecting the International Energy Agency’s unhinged declaration that all investments in new coal mines, oil and gas wells must cease by 2050, he’s made a bad call on gas in regional NSW.

This morning the government announced it will build a new gas-fired power plant in the Hunter to replace the ageing Liddell coal-fired power plant and avoid “unacceptable price increases”.

Although the Coalition’s “gas-fired recovery” is definitely more appealing than NSW Energy Minister Matt Kean’s “renewable energy roadmap” to net zero, they’ve still backed the wrong horse.

For not only is the Hunter one of the world’s largest coal basins, but the site chosen for the new gas-fired power plant is a mere 40-minute drive from the world’s largest coal export port, the Port of Newcastle.

Moreover, NSW imports more than 95 per cent of its gas, forcing the state to be reliant on its neighbours, and resulting in additional import costs for already-struggling consumers.

This is not a good deal for the people of New South Wales.

With Australia’s largest coal-fired power station, Eraring (which produces 20 per cent of NSW’s daily power needs) set to close in 2032 following the closure of Victoria’s Yallourn coal power plant in 2028 and Liddell in the summer of 2022-23, the Coalition has no excuse not to build a new coal-fired power plant.

Afterall, millions of tonnes of Australia’s high-quality, low emissions thermal coal is sent to China, India, Korea, Japan and Vietnam for the production of baseload power every year from Port Newcastle; and yet Australia’s politicians, journalists and bureaucrats still think it’s too “environmentally unfriendly” to back a coal-fired power plant around the corner from it!

Instead, the Coalition has chosen gas so it can accommodate more solar and wind in the system, as gas is more effective in scaling up and down to offset supply shortages when the wind doesn’t blow and the sun doesn’t shine.

And because many of the “modern Liberals” believe gas still isn’t green enough, the government is now funnelling hundreds of millions into getting the cost of hydrogen power to less than $2 per kg – ignoring the fact that this is still more than threefold the present price of gas, let alone coal.

As economist Alan Moran points out, the government’s plan to “spend $18 billion in low emission technologies over the next ten years” represents the “subordination of energy policy to climate policy” with some of the “ambiguities” in the grid created as a result of such “wasteful spending” including:

  • “Electricity use has evolved to be on-demand, but we are building intermittent power sources
  • “Electricity storage is expensive, but we are building power sources that require storage
  • “Networks are the largest component of power bills and create the most outages, but we are building power sources that depend on larger more complex networks
  • “Rooftop PV reduces reliance on the grid, while wind and solar farms require a larger more expensive grid, but we are building lots more of both
  • “Synchronous generators inherently provide auxiliary services – such as inertia, reactive power, fault level and bulk power – but we are building a more complex fragile power system where each of these auxiliary services are provided by a separate piece of the system
  • “We are building a power system so interconnected that an hour of low wind in South Australia (the smallest most distant part of the grid) creates a price spike across the entire network.”

What could possibly go wrong?

If only Australia still had the Scott Morrison who proudly took a lump of coal into parliament.

Perhaps then we wouldn’t be stuck with Chinese-made solar panels and wind turbines, experimental hydrogen, and gas which we sell to the Japanese for less than what we sell to ourselves

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